Tata's Game-Changing Move: Paving the Way for iPhone Manufacturing in India

Tata Group has a long history of making the nation proud and has made significant contributions to the country’s development. Be it the Mumbai Serial Blasts of 1993 or the COVID-19 Pandemic, Tata Group is one of the first ones coming to the nation’s rescue. Tata Group has added yet another feather to its cap, helping the nation in geƫting closer to the ‘MAKE IN INDIA’ dream or the concept of ‘AATMANIRBHAR BHARAT’.

Tata Group is all set to manufacture India’s first homegrown iPhone, after more than a year of speculations by experts. This comes after Tata Group buys Taiwanese iPhone Manufacturer Wistron’s iPhone Manufacturing Unit in India for $125 Mn. As part of this deal, Tata will acquire the Karnataka plant of Wistron, which employs about 10,000 people to assemble iPhone14.

This deal was made public on October 27th, 2023 by the Minister of State for Electronics and Information Technology, Rajeev Chandrasekhar on his X handle, as he tweeted “PM Narendra Modi Ji’s visionary PLI scheme has already propelled India into becoming a trusted & major hub for smartphone manufacturing and exports. Now within just two and a half years, @TataCompanies will now start making iPhones from India for domestic and global markets from India.”

Taipei-based Wistron Corp’s board on October 27th, 2023 granted approval to sign the share purchase agreement with Tata Electronics Private Limited (TEPL) for the sale of its 100% indirect stake in Wistron Infocomm Manufacturing (India) Pvt. Ltd (WMMI).

TEPL is a wholly owned subsidiary of Tata Sons. It was set up to lead the group’s ambitions to become a scaled mobile phone and component contract manufacturer, after group chairman N Chandrasekaran sought to leverage the geopolitical backlash against China and woo smartphone companies like Apple to alternative production sites in India.

Companies like Tata, which can specialize in both high-volume, low-margin and low-volume, high-margin products with the takeover of Wistron’s facilities, will help catalyze the electronics ecosystem, Chandrasekhar said.

What are the benefits to the country?

In the last five years, India has made major strides in establishing an iPhone manufacturing ecosystem. all the latest Apple models were made here and even exported by Apple’s three contract partners —Foxconn, Wistron and Pegatron.

According to a report by JPMorgan, Apple plans to shift 25% of its iPhone production to India by 2025 in a bid to diversify its manufacturing base, which is currently concentrated in China.

China's contribution to iPhone production is expected to drop to 91.2% of global shipments in 2023, from 93.5% in 2022. By the end of this year, India's contribution will increase to 10% of global shipments, from 5-7% last year, and also meet 85% of the local demand, according to Counterpoint Research. Apple’s India shipments in 2023 are expected to surpass the record 9 million units against 6 million units shipped in 2022. The Made in India iPhones will be exported too, thus contributing in reducing the Balance of Payments Deficit and an inflow of Forex into the country.

What are the benefits to the common man?

Once iPhone production starts in the country, it is being speculated that the cost of the iPhone may come down, as currently iPhones are imported from China, which attracts heavy custom duties and taxes. iPhones will be more affordable and there will be a surge in the employment opportunities as Tata eyes expansion of the plant, to increase the workforce to 15000 workers from the earlier 10000. Tata Group is also in talks to set up a semiconductor plant in the country, which will provide the necessary components for the iPhone manufacturing. This move is believed to increase the company’s value in the Indian Markets as Tata may get a complete in-house supply chain, i.e., from components manufacturing to assembly, all under one roof. Indian investors may expect great returns from Tata Group companies once the production starts.

What are the key takeaways?

Tata Group is set to manufacture India's first homegrown iPhone, acquiring Wistron's iPhone Manufacturing Unit for $125 million. This significant move aligns with India's 'Make in India' and 'Aatmanirbhar Bharat' (self-reliant India) initiatives. Tata will take over Wistron's Karnataka plant, employing 10,000 people for iPhone 14 assembly. As the production begins, Tata also plans expansion of the facility, which will help the Indian investor get good returns in the Indian Bourses. The homegrown iPhone will bring down the cost of iPhone in the domestic market, and sales are expected to skyrocket. This development is seen as a result of Prime Minister Narendra Modi's Production-Linked Incentive (PLI) scheme, driving smartphone manufacturing in India. Apple intends to shift 25% of iPhone production to India by 2025, reducing its reliance on China. This deal positions India as a growing hub for iPhone production and export.